Murata wants to build from MEMS to Internet of Things

VANTAA, Finland – Murata Manufacturing Co. Ltd. has been on the acquisition trail for several years and it is now fine tuning its approach as it seeks to move up in complexity and value through MEMS to the Internet of Things (IoT).

Murata (Kyoto, Japan) is often billed as a passives-to-power-supplies giant. With annual sales of 584.7 billion yen (about $7.34 billion) in the year to March 31, 2012, Murata is definitely a giant and one that is well known for its multilayer ceramic capacitors, but it makes a broad range of components including wireless modules and a variety of sensors.

In an interview with president Tsuneo Murata, conducted during his visit to the newly acquired MEMS manufacturer VTI Technologies Oy (Vantaa, Finland) here – as it was renamed Murata Electronics Oy – EE Times asked Murata about the company's acquisition strategy.

Tsuneo Murata, president of Murata Manufacturing Co. Ltd., during his visit to the company's MEMS subsidiary in Finland on May 25, 2012.

Was it about moving away from passives and up in terms of complexity and value? "Murata has produced sensors for 20 years. But without creating such good quality as VTI," said Murata. "Yes we are going to go in that direction but not go too far away from the original business."

And Murata emphasized that it is not just about the product complexity and value but also about the end markets. "In the case of VTI they are very strong in automotive and industrial, areas where Murata is not so strong."

Murata's strengths traditionally lie in communications and consumer applications with 45 percent of sales in communications, 19 percent in PCs and peripherals and 10 percent in audio-visual consumer electronics, Murata said. About 75 percent of VTI sales are into the automotive sector where it is a leading supplier of accelerometers, gyroscopes and combo units for electronic stability control (ESC).

Murata acquired VTI, which manufactures MEMS on 150-mm diameter wafers, in January 2012 for about 20 billion yen (about 190 million euro or $260 million) in cash, so what does the company intend to do with it?

"We want to reinforce the business in automotive. Then we want to have new products in the consumer area," said Murata. Murata said automotive is good business and expanding as the electronics content of automobiles goes up. Providing MEMS to the consumer sector will be a next step. The consumer market is quite different to the automotive and medical sectors where VTI has been strong, characterized by less demanding specifications but thin margins and downward price pressure. "It's very tough to compete [in consumer]. We need to have a good strategy," said Murata. "To get into consumer we may need to utilize some outsourcing," he added.

This suggests that rather than expand into 200-mm wafer processing in Vantaa the company is more likely to work with one of the mainstream IC foundries, such as GlobalFoundries Inc. or Taiwan Semiconductor Manufacturing Co. Ltd. that have fabs in southeast Asia, and who are eager to expand into MEMS production.

There are already many players in the emerging IoT market, from sensor makers to communication component supplier to solution providers. What is lacking is product that makes sense of sensor data and provides actionable analytics to the users in a familiar form.
MP Divakar

Seems like the early adopters are the ones who don't really care much about the energy bill (at least in the US!) but like the aspect of controlling everything from where ever they are. I know of many friends who ponied up couple of grand $$ for these so they could show off turning the alarm on from their iPhone!
MP Divakar

Is not exactly IoT but wireless sensor networks. These will enable the wireless control and sensing of energy consumption and will allow to save energy by turning of lights or heating or air conditioning when not required.

"One reason is the energy crisis in Japan. We have shut down all the nuclear plants. And in China the demand for electricity is increasing very rapidly and they face environmental issues." - Why IoT is related to high demand for electricity and environmental issues?

Murata is well known for its portfolio of passive product offerings. This is a very good strategic move made by Murata for its growth as MEMS is one of the next big things in the automotive and medical electronics.

Murata has a very strong expertise in the design and production of analog components, it will be a very good use of this expertise in the design and development of MEMS. This will be a very good step for quality analog components.